The Petroleum Products Pricing Regulatory Agency (PPPRA) and other key agencies in Nigeria’s multi-billion dollars oil and gas industry are at the eleventh hour of their existence in their present form.
This comes as harmonisation of the Petroleum Industry Bill (PIB) recently passed by the National Assembly nears completion. Harmonisation work of contradictory provisions in the bill, which began penultimate Monday, was billed to be finalised this week.
This is the last procedure that leads to its presentation for presidential assent.
The bill would privatise the Nigerian National Petroleum Company (NNPC), amend changes to deepwater royalties made late 2019 and scrap PPPRA and other key regulatory agencies in favour of new bodies. “The bill is awaiting the presidential assent after the completion of an on-going harmonisation at the National Assembly,” this newspaper learnt. President Muhammadu Buhari has sent the bill to the Senate.
It, along with the House of Representatives, signed off on the bill penultimate week. This is much needed before the bill can become law in Nigeria, Africa’s largest crude exporter.
The legislation has been in the works for the past 20 years and looks to revise laws governing Nigeria’s oil and gas exploration not fully updated since the 1960s because of the contentious nature of any change to oil taxes, terms and revenuesharing.
The bill proposes creating a limited liability corporation into which the ministers of finance and petroleum would transfer NNPC’s assets. Government would then pay cash for shares of the company and it would operate as a commercial entity without access to state funds.
The changes would, in theory, make it easier for the struggling company to raise funds. The legislation would also amend controversial changes to deep offshore royalties made late last year by cutting the roy-alty that companies pay government for offshore fields producing less than 15,000 barrels per day to 7.5 per cent from 10 per cent.
It would change a pricebased royalty too, so that it kicked in when oil prices climbed above $50 per barrel, rather than $35.
The measure would also scrap the Petroleum Equalisation Fund, which used to distribute cash to keep nationwide petrol prices uniform and transfer remaining money to a midstream gas infrastructure fund.
In addition, it would create new regulatory bodies, scrapping the Petroleum Products Pricing Regulatory Agency (PPPRA) and transferring to a new commission many of the tasks currently handled by the Department of Petroleum Resources (DPR).